Michael Foods, Inc. (Nasdaq: MIKL) today announced record net sales, net earnings, and diluted net earnings per share for the third quarter and first nine months of 2000.
Diluted net earnings per share for the three months ended September 30, 2000 were $0.64 compared to $0.52 per share in 1999’s third quarter, an increase of 23%. Net earnings for the third quarter of 2000 increased 10% to $11.8 million compared to $10.7 million in 1999’s third quarter. Net sales for the three months ended September 30, 2000 were $276.6 million compared to $269.9 million, an increase of 2.5%.
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Diluted net earnings per share for the nine months ended September 30, 2000 were $1.73 compared to $1.48 per share in 1999’s first nine months, an increase of 17%. Net earnings for the first nine months of 2000 increased 9% to $33.6 million compared to $30.9 million in 1999’s first nine months. Net sales for the nine months ended September 30, 2000 were $795.1 million compared to $781.3 million, an increase of 2%.
Commenting on the record financial results, Chairman, President and Chief Executive Officer Gregg A. Ostrander said, “Outstanding results from our Refrigerated Distribution Division, coupled with an on-going earnings improvement at our Dairy Products Division, led to higher corporate earnings for the third quarter. Excellent distributed products unit sales growth of 9%, along with tight expense controls and normal raw material costs, drove strong Refrigerated Distribution earnings growth. While Dairy Products sales were flat, the sales mix improved, with excellent growth seen in creamer sales. This, along with a steady improvement in plant operating costs, pushed Dairy Products operating earnings well ahead of depressed prior year levels.”
Ostrander continued, “Our largest division — Egg Products — had a challenging third quarter, but still showed solid results. A very low egg market in July gave way to a surprisingly strong market in August, both of which pressured margins for industrial egg products. Regarding August, a rapid rise in egg raw material costs was experienced against a backdrop of lagging industrial products pricing. Pricing adjustments and less volatile market conditions in September resulted in much improved industrial egg products results and, in turn, notably better divisional profitability for the month. Throughout these market fluctuations, our largest category — value-added egg products — performed strongly, with excellent sales and earnings results from our precooked and egg substitute lines. Lastly, Potato Products results somewhat lagged our expectations, with earnings declining due to slightly lower sales of retail hash browns and increased marketing spending.”
Unaudited segment data follows (in thousands):
External Net Sales Operating Profit
Three Months Ended Three Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
Egg Products $162,461 $157,843 $16,665 $17,935
Refrigerated Dist. 57,636 55,833 3,829 2,462
Dairy Products 41,305 41,498 1,329 319
Potato Products 15,166 14,737 1,548 2,006
Corporate N/A N/A (1,129) (1,328)
External Net Sales Operating Profit
Nine Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
Egg Products $472,849 $460,481 $50,757 $52,537
Refrigerated Dist. 169,073 166,382 11,962 7,046
Dairy Products 109,237 112,251 2,271 3,272
Potato Products 43,951 42,206 4,534 4,565
Corporate N/A N/A (4,454) (6,232)
Michael Foods, Inc. is a diversified food processor and distributor with particular interests in egg products, refrigerated grocery products, specialty dairy products and refrigerated potato products. Principal subsidiaries include Papetti’s Hygrade Egg Products, Inc., M. G. Waldbaum Company, Crystal Farms Refrigerated Distribution Company, Kohler Mix Specialties, Inc. and Northern Star Co.
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By GlobalDataCertain items in this release may be forward-looking statements, which are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous risks and uncertainties, including the impact of potential changes in domestic and international economic conditions on the operations and future prospects of Michael Foods, Inc. Additional risks and uncertainties include variances in the demand for the Company’s products due to customer developments and industry developments, as well as variances in the costs to produce such products, including normal volatility in egg costs and feed costs. As a result, the Company’s actual financial results could differ materially from the results estimated by, forecasted by, or implied by the Company in such forward-looking statements.
Consolidated statements of earnings follow.
Michael Foods, Inc.
Consolidated Statements of Earnings
(000's)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Net sales $276,568 $269,911 $795,110 $781,320
Cost of sales 228,820 223,162 650,872 642,301
Gross profit 47,748 46,749 144,238 139,019
Selling, general &
administrative 25,506 25,355 79,168 77,831
Operating profit 22,242 21,394 65,070 61,188
Interest expense, net 3,524 3,241 9,778 8,862
Earnings before income
taxes 18,718 18,153 55,292 52,326
Income tax expense 6,900 7,440 21,710 21,450
NET EARNINGS $11,818 $10,713 $33,582 $30,876
Earnings per share
Basic $0.65 $0.53 $1.75 $1.50
Diluted $0.64 $0.52 $1.73 $1.48
Weighted average common
shares outstanding
Basic 18,278 20,251 19,172 20,574
Diluted 18,516 20,522 19,394 20,818
